The U.S. government has no foreseeable plans to put an end to its being a part owner of General Motors, The Detroit News reports. Tim Massad, who serves as the acting assistant secretary for financial stability at the U.S. Treasury, said that there's no timetable yet for the government to leave GM. Massad said that “real progress” has been made by GM but then, it’s the market that hasn’t given it much credit.
Massad looks out for the $700 billion Troubled Asset Relief Program as well as the 26% stake of the government in GM common stock. He asserted that the U.S. Treasury would have to balance its goal to maximize recovery for the taxpayers with how fast it makes its exit. The publication estimates that if the government exits now, it would incur losses of over $15 billion on the $49.5 billion bailout at present stock prices.
The U.S. government has so far got back about $23 billion of its GM bailout. Initially, it got a 61% stake in the automaker. To break even, the Treasury would have to receive $53 on average for each of its 500 million shares in GM stock to break even.
The Obama administration doesn’t intend to sell any GM stock before the November election since voters may be reminded about the financial costs of the bailout, according to senior administration officials. [source: Autonews]